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As the election unfolds and swings here and there abound (mostly there to the Tories), we can distract ourselves with statistics of a different kind. The Insolvency Service (IS) have today published the first quarter statistics for insolvencies in 2010.
On the personal side the statistics show that there were 35,682 individual insolvencies in England and Wales in the first quarter of 2010. As the IS note, "This was an increase of 17.9% on the same period a year ago. This was made up of 18,256 bankruptcies (which were down 10.7% on the corresponding quarter of the previous year), 11,782 Individual Voluntary Arrangements (IVAs), (which were up 20.1% on the corresponding quarter of the previous year) and 5,644 Debt Relief Orders (DROs)." DROs it seems are storming ahead as a form of bankruptcy-lite (TM).
On the corporate side the statistics show that there were 4,082 compulsory liquidations and creditors’ voluntary liquidations in total in England and Wales in the first quarter of 2010 (on a seasonally adjusted basis). As the IS note, "This was a decrease of 8.4% on the previous quarter and a decrease of 17.8% on the same period a year ago. This was made up of 1,314 compulsory liquidations (which are down 1.3% on the previous quarter and down 14.8% on the corresponding quarter of the previous year), and 2,768 creditors voluntary liquidations (which are down 11.4% on the previous quarter and down 19.1% on the corresponding quarter of the previous year). In the twelve months ending Q1 2010, approximately 1 in 120 active companies (or 0.8%) went into liquidation, which is a decrease from the previous quarter, when this figure stood at 1 in 114 (0.9%)... Additionally, there were 1,343 other corporate insolvencies in the first quarter of 2010 (not seasonally adjusted) comprising 356 receiverships, 783 administrations and 204 company voluntary arrangements. In total these represented a decrease of 24.7% on the same period a year ago."
It is perhaps understandable that the story has not yet been picked up by most of the press. They are rather busy on other matters. As ever Aunty can be trusted to come through with something as well as the Guardian. Additionally, the new R3 President has also issued a press release. His comments on the corporate side are most interesting. He notes: "Today’s drop in corporate insolvencies comes a surprise to many and masks a large number of corporate insolvencies that have yet to come through the system. Personally I have seen about a 25% increase in the amount of formal insolvency work since the start of the year - small companies with revenues under £15m are the worst affected. Many cases remain in the pipeline and will not show up in today’s official figures." He is equally pessimistic about the picture on the personal side of the subject. He observes: "Today’s increase in personal insolvency is as expected as the debt hangover filters through to official insolvency statistics and unemployment increases. However, there remains something of a ‘debt iceberg’ with many more people in unrecorded Debt Management Plans which are not included in today’s statistics. According to estimates by R3 this could amount to 500,000 people, more than double the number in formal insolvency procedures."
"This is the ultimate statement of where the law on IVAs is to be found in our great common law...